D.C. Circuit Court Strikes down Provisions of EPA’s 2015 Changes to the Definition of Solid Waste

On July 7, 2017 the U.S. Court of Appeals for the District of Columbia struck down provisions of the the EPA’s 2015 update to the Definition of Solid Waste (“DSW”).  In 2015, EPA enacted a final rule governing when certain hazardous materials qualify as “discarded”, thus subjecting the materials to EPA’s regulatory authority.  In this ruling, the court addressed industry concerns about Legitimacy Criteria of 40 CFR 260.43(a)(1)-(4), and the Verified Recycler Exclusion.

Legitimacy Criteria:

The court struck down the fourth part of a 4 part legitimacy test.  The referenced legitimacy test, under 40 CFR 260.43(a)(1)-(4), meant that a generator must prevail on the following:

  1. The hazardous secondary material must “provide a useful contribution to the recycling process.”
  2. The “recycling process must produce a valuable product or intermediate.”
  3. The persons controlling the secondary material must “manage the hazardous secondary material as a valuable commodity.”
  4. The “product of the recycling process must be comparable to a legitimate product or intermediate.”

Factors 1 and 3 address the process, Factors 2 and 4 the product.

Industry petitioners took issue with Factors 3 and 4.  On Factor 3, petitioners argued against EPA regulation of how materials are stored based on a prior ruling of the court.  However, the court agreed with EPA on this point and held that

“EPA can impose a containment requirement so long as it is such that an inference of “sham” or illegitimacy would logically flow from a firm’s non-compliance. And given EPA’s explanation that a material may be “contained” if it is simply piled on the ground, [the Final Rule] meets specific requirements that petitioners do not challenge as unreasonable…”

Factor 4 was more of a challenge for the court.  In considering the details of this rule, industry made many arguments against the rule.  The court sided with EPA on many of these arguments, but the court ultimately rejected the rule because, when considered with the rest of the rules, it meant that failure to follow EPA prescribed procedures would mean that a non-waste would become a waste, stating:

“But paperwork is not alchemy; a legitimate product will not morph into waste if its producer fails to file a form (or loses a copy two years later). EPA insists that it can impose burden-shifting rules even in drawing the line between what it may and may not regulate.”

and ultimately, the court states…

“For these reasons Factor 4 is unreasonable as a requirement applied, through 40 C.F.R. § 261.2(g), to all hazardous secondary material recycling.”

Verified Recycler Exclusion

The 2015 Final Rule amended EPA’s stand on “reclamation”.  EPA defines reclamation as a type of recycling that occurs when secondary materials are “processed to recover a usable product, or . . .regenerated.” The other modes of recycling are “use” or “reuse” which occur when materials are used as effective substitutes for commercial products or when they are employed as ingredients in industrial processes to make products.

In its 2015 final rule, EPA adopted two general exclusions that depend on whether the recycling is performed by a third-party.  The so-called “Generator-Controlled Exclusion” governs reclamation “under the control of the generator.” [§ 261.4(a)(23)].  That exclusion was not challenged in the current court case.  The second exclusion, called the “Verified Recycler Exclusion” replaced a prior rule known as the “Transfer-Based Exclusion”.  With the earlier Transfer Based Exclusion, generators were required to evaluate prospective reclamation company by asking and evaluating the following 5 questions:

  1. is the reclamation company employing a legitimate recycling process;
  2. had the reclamation company notified regulators of its operations and its financial stability;
  3. has the reclamation company been the subject of recent enforcement actions;
  4. does the reclamation company have adequate skill and equipment to perform the recycling safely; and
  5. does the reclamation company have adequate processes for disposing of any residual wastes generated during the recycling.

Once the generator satisfactorily evaluated these questions, they could proceed with the reclamation of the hazardous secondary material.  However, the new Verified Recycler Exclusion rule added other burdens, including registration with EPA.  Opponents to the new rule argued that the EPA had no basis for making the change.  Ultimately, the court agreed.  The court did rule that two parts of the new requirements could stand – a requirement for emergency preparedness planning and a requirement for containment.  However, the rest of the rule was thrown out by the court, meaning the rule would defer back to the Transfer-Based Exclusion.

Conclusion:

The court summarized its ruling with the following statement:

“The Final Rule is upheld in part and vacated in part as consistent with this opinion. Briefly put: Factor 3 is upheld; Factor 4 is vacated insofar as it applies to all hazardous secondary materials via § 261.2(g); the Verified Recycler Exclusion is vacated except for its emergency preparedness provisions and its expanded containment requirement; and the Transfer-Based Exclusion is reinstated. As a consequence of the latter, the removal of that exclusion’s bar on spent catalysts is vacated, subject, as we noted above, to such arguments as parties may raise supporting a different outcome.

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Do you have a great idea in Beneficial Reuse? Talk to Altiras.

If you have a great idea in the area of beneficial reuse and you are looking for a company to provide legal, technical, regulatory, marketing or business expertise then Altiras may be able to help.  Altiras Holdings actively seeks investment opportunities in recycling, recovering, and processing of hazardous and non-hazardous secondary materials and hazardous wastes such as used solvents, chemical coproducts, chemical byproducts, residues, and various petroleum products.  Examples can include building specialized recycling plants, developing technology to process otherwise unusable hazardous wastes, and deploying various other types of assets to help consolidate and recover hazardous and non-hazardous secondary materials.

If you have an idea that you would like to discuss confidentially, please contact Todd Pencarinha at 713-568-3651.

Can my Hazardous Secondary Materials be applied to the land?

The answer is “yes”.  Environmental professionals often believe that land application is not acceptable for any type of hazardous secondary material (ie. hazardous chemical coproducts, byproducts, or used chemicals), but this is simply not the case.  While RCRA and state regulations do ban land application as “use constituting disposal” for many materials, use of certain hazardous secondary materials in land application IS ACCEPTABLE under certain conditions.   Specifically, if the hazardous secondary material has a corresponding prime chemical that is normally used in such land application then use of the secondary material may be permissible.  the key to success is ensuring that the hazardous secondary material has no “toxics along for the ride” and that it is not a listed waste.  If these criteria can be met, then the material may be able to be used in a land application.  Careful evaluation of the ultimate disposition of each of the potentially hazardous constituents should be made to ensure risks are no different for use of the corresponding prime product.

For a specific example of this type of land application, please see our blog entitled “Can my former sulfuric acid waste be used to make fertilizer?

For more information about this topic, for general questions about beneficial reuse, or for more information about Altiras, please contact Todd Pencarinha at 713-568-3651.

Guidance for Evaluating Beneficial Reuse of Hazardous Secondary Materials

In a prior post I provided guidance and reference information from EPA on the beneficial reuse of NON-hazardous secondary materials.  Despite the lengthy reference document, beneficial reuse of non-hazardous secondary material (that would otherwise be non-hazardous waste) is relatively easy when you have a legitimate use for the material.  While the process and details for the beneficial reuse of hazardous secondary materials (materials that would otherwise be hazardous wastes) are more involved, the process does not have to be overly complicated.  The process encompasses the the whole of the process for non-hazardous materials, but necessarily adds to the process.  Unfortunately, EPA does not provide a similar document for guidance on hazardous secondary materials.  Nevertheless, with hazardous materials EPA is still primarily concerned about i) the legitimacy of the beneficial reuse AND ii) about the safety and environmental impact of such use.  In order to assist generators in their assessment, I have developed 6 key questions that cover most of the regulatory considerations, which generators should address when considering beneficial reuse of hazardous secondary materials.  Those 6 questions follow with additional detail provided after each question.

1. Can the material be used “as-is” for the intended purpose or does something have to be done to it first in order to make it usable (40 CFR 261.2(e))?  Use “as-is” is the key to Altiras Chemicals and Altiras Fuels distribution businesses.  Materials that can be used as they are produced are generally exempt from regulation as a waste.  Materials that are filtered, treated, neutralized, distilled, etc. must generally be treated as wastes and therefore use is not permitted unless some other exemption or exclusion allows it.  Acceptable uses include, but are not limited to, use in a blend that is then directly used, use as a reagent in a reaction, or use in a direct application such as a solvent.

2. Is the use legitimate (40 CFR 260.43)? If the material can be used in a manner that meets the requirements above, then the use must be legitimate.  One good test of this requirement is whether the value of the material that is being used actually improves the economics of the process using it.  For example, if a material is being used in a solvent blend and such use improves the net economic value of the blend, then use is likely legitimate.  However, if such use in this example reduces the net economic value of the blend,  then it may not be legitimate.  Some users have historically tried to circumvent this concept by getting paid by generators to take materials.  While such payment does not necessarily mean the use is illegitimate, it is certainly cause for scrutiny.

3. Does the use constitute disposal, involve burning the material, involve reclamation, or is it speculative (40 CFR 261.2(c)(1)-(4) and (e)(2))?  If the material is applied to the land or used as an ingredient for a product that is applied to the land, then such use MAY be prohibited.  However, such use may also be perfectly acceptable if material that it is a substitute for is normally used to make products applied to the land.  Examples are sulfuric and nitric acid.  So long as the used acid does not contain toxic materials not normally in prime acid, and does not have some other characteristic or listed hazardous designation, then use for a product that is applied to the land can be perfectly legitimate and acceptable.  Separately, if the material is burned and it is not fuel itself, then such use could be prohibited, with a few exemptions.  If the material is reclaimed it is generally regarded as a hazardous waste (with few exclusions).  Finally, materials that are accumulated without a clear use or with excessive time before use are generally also considered wastes. There are always some special circumstances that can allow for legitimacy, but unless the use is clear and the timing reasonably short, the use will likely be considered speculative by EPA.

4. Does the material contain hazardous constituents or characteristics that are not normally present in materials that are normally used for the intended purpose (40 CFR 261.2(d)(3)(i)(B) and 260.43(a)(4))? This question, along with the next two questions, is really a matter of good product stewardship.  The specific chemicals species that are listed by EPA are not all that should be evaluated.  Good product stewardship means every chemical constituent that is not normally present in the alternative prime product should be evaluated.  The material should be analyzed over multiple batches to ensure statistically significant data to understand what other species must be evaluated. Once identified, they must be compared with the listed species from EPA and the characteristics must also be evaluated to make sure the material is not ignitable, corrosive, or reactive when the alternative prime product is not.  Once this step is take, the material must be further evaluated as described below.

5. Will the product be handled with the same or greater precautions as other materials used for the same purpose 40 CFR 260.43(a)(3)?  Similar methods of handling and management are good indicators that the material is consistently similar to the alternative prime material. However, materials should NOT be handled in the same way if they have characteristics or constituents that warrant a greater level of care.  Conversely, hazardous secondary materials that are legitimately being used as raw materials should not be managed as if they were hazardous wastes, for example, by being put into RCRA tanks.

6. Does the use of the material create any risks to human health or the environment that the normal alternative products do not have (40 CFR 261.2 (d)(3)(ii))?  Again, this question relates to good product stewardship.  The focus here should be on differences between the hazardous secondary material and the normal raw material.  For example, sulfuric acid that is being beneficially reused is going to be characteristically corrosive, just like prime sulfuric acid.  However, a used sulfuric acid that contains lead, arsenic, or another heavy metal at levels greater than prime acid should be managed in such a way that those metals do not pose a risk to human health or the environment.  Presence of those metals at higher levels than prime does not necessarily preclude beneficial reuse, but it is often best to seek concurrence from EPA and the state agency prior to beneficial reuse.

The above discussion is by no means comprehensive, and really just scratches the surface of things that should be addressed when considering the beneficial reuse of hazardous secondary materials (that would otherwise be hazardous wastes).  In all cases, the generator should be thorough in this evaluation and carefully and clearly document all aspects of the use since the burden of proof of appropriate beneficial reuse always lies with the generator of the material.

For more information on this blog, Altiras’ beneficial reuse solutions, or for specific questions on beneficial reuse, please contact Todd Pencarinha at 713-568-3651 or by email at info@altiras.com.